Economic Growth, Education, and Aids in Kenya: A Long-Run Analysis

47 Pages Posted: 20 Apr 2016

See all articles by Clive Bell

Clive Bell

University of Heidelberg - South Asia Institute (SAI)

Ramona Bruhns

Yale University - Economic Growth Center

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: October 1, 2006

Abstract

The AIDS epidemic threatens Kenya with a long wave of premature adult mortality, and thus with an enduring setback to the formation of human capital and economic growth. To investigate this possibility, the authors develop a model with three overlapping generations, calibrate it to the demographic and economic series from 1950 until 1990, and then perform simulations for the period ending in 2050 under alternative assumptions about demographic developments, including the counterfactual in which there is no epidemic. Although AIDS does not bring about a catastrophic economic collapse, it does cause large economic costs - and many deaths. Programs that subsidize post-primary education and combat the epidemic are both socially profitable-the latter strikingly so, due to its indirect effects on the expected returns to education - and a combination of the two interventions profits from a modest long-run synergy effect.

Keywords: Population Policies, Primary Education, Education For All, Adolescent Health, Economic Theory & Research

Suggested Citation

Bell, Clive and Bruhns, Ramona and Gersbach, Hans, Economic Growth, Education, and Aids in Kenya: A Long-Run Analysis (October 1, 2006). World Bank Policy Research Working Paper No. 4025. Available at SSRN: https://ssrn.com/abstract=935174

Clive Bell (Contact Author)

University of Heidelberg - South Asia Institute (SAI) ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Ramona Bruhns

Yale University - Economic Growth Center ( email )

27 Hillhouse Ave.
New Haven, CT 06511
United States

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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